The misery index is an interesting economic indicator, courtesy of Arthur Okin, a famous American economist. The idea behind it was a sort of early attempt to capture or measure the misery that one would supposedly experience when the economy was not doing too well. It is basically a combination of the unemployment rate and the rate of inflation combined into a single measure. The graph above plots the misery index for the U.S. over the past four decades with the blue bar representing unemployment and the red bar the rate of inflation. From its peak levels in the 70's and early 80's (high inflation and unemployment), the misery index has been steadily dropping with the occasional short period spikes in unemployment (91-93). Inflation has been far more tamed when compared to the late 70's and early 80's. On the other hand, we note a sharp rise in the unemployment rate, according to the most up to date figures (09), a somewhat worrying observation in the context of dire economic conditions!
